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Old 04-25-2021, 04:58 PM   #101
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What's the clue for rates turning around so we can sell short term
and buy back into Total Bond? It's too risky for me to hear the
noise at the right time, so I stick to my plan.

Best to you,

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Fair enough. I am not trying to talk you into anything.

I just thought your statement that the current yield of 1.3 percent or so was double what the OP's cash was making needed a bit of context.
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Old 04-25-2021, 05:11 PM   #102
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Thatís how I feel. Come rebalancing time Iíll add more.
Same here.
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Old 04-25-2021, 05:24 PM   #103
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I just thought your statement that the current yield of 1.3 percent or so was double what the OP's cash was making needed a bit of context.
It was actually me who said that.


You're right. The total return is important. Investing in a mutual fund, of any sort, you need to look at the big picture, not just the yield. There is principal risk that doesn't exist with a cash account. If you buy a bond fund, or a stock fund, you need to know that at least in the short term you could lose money.
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Old 04-25-2021, 08:44 PM   #104
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It was actually me who said that.


You're right. The total return is important. Investing in a mutual fund, of any sort, you need to look at the big picture, not just the yield. There is principal risk that doesn't exist with a cash account. If you buy a bond fund, or a stock fund, you need to know that at least in the short term you could lose money.
I grabbed the wrong post, but it sounds like we agree.

And apologies to Van Winkle!
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Old 04-26-2021, 03:48 AM   #105
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Originally Posted by disneysteve View Post
It was actually me who said that.


You're right. The total return is important. Investing in a mutual fund, of any sort, you need to look at the big picture, not just the yield. There is principal risk that doesn't exist with a cash account. If you buy a bond fund, or a stock fund, you need to know that at least in the short term you could lose money.
Money is not "lost" unless shares are sold at a lower price than they were purchased.

The type of funds we are talking about (average duration of 6 years) are not something that should be getting bought/sold all the time. They should be held at least 7 years, and over that much time, the holder will make very close to the average of the SEC yield.

Seriously folks - stop looking at the performance over the last 3/6/12 months. That's not the purpose of these funds.
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Old 04-26-2021, 06:55 AM   #106
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Money is not "lost" unless shares are sold at a lower price than they were purchased.

The type of funds we are talking about (average duration of 6 years) are not something that should be getting bought/sold all the time. They should be held at least 7 years, and over that much time, the holder will make very close to the average of the SEC yield.

Seriously folks - stop looking at the performance over the last 3/6/12 months. That's not the purpose of these funds.
Totally agree. These are long term investments, not trading instruments.


But it is also true that there is potential principal risk. If someone is moving money from cash to a bond fund to boost returns, they do need to be aware of that.
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Old 04-26-2021, 07:37 AM   #107
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The type of funds we are talking about (average duration of 6 years) are not something that should be getting bought/sold all the time. They should be held at least 7 years, and over that much time, the holder will make very close to the average of the SEC yield.

Iíve finally completed moving all my bond funds to my tIRA where they will sit with reinvestment turned on. The Roths get the stock portion (hoping/assuming better growth over time).
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Old 04-26-2021, 10:44 AM   #108
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I continue to be kinda weirded out by bonds ... are there long term structural changes ongoing that would, perhaps, change the concepts we use to evaluate their component in our AA?

I’ve mentioned before that I sort of gave up on CDs and bonds awhile back - instead using ATT as a surrogate ... 7+ percent with pretty low volatility.
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Old 04-26-2021, 03:48 PM   #109
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Originally Posted by mrfeh View Post
Money is not "lost" unless shares are sold at a lower price than they were purchased.

The type of funds we are talking about (average duration of 6 years) are not something that should be getting bought/sold all the time. They should be held at least 7 years, and over that much time, the holder will make very close to the average of the SEC yield.

Seriously folks - stop looking at the performance over the last 3/6/12 months. That's not the purpose of these funds.
Yep. and I can just buy a 7 year Treasury yielding 1.2 something and nearly match BND's 1.3 SEC yield with no risk of corporate bonds. It really doesn't matter. I just prefer to hold CD's and Treasuries to maturity and not concern myself with market values.
I do hold some bond funds as a comparison and wonder how they would fare in a longer term increase in rates. Not just a single 1% increase but a series of increases over many years. I'm guessing the end result would be the same but I may not live long enough to see it.
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